GST increase on the agenda despite government denials

Prime Minister Tony Abbott told Parliament on Tuesday he wants a mature national debate on the goods and services tax but has denied that the government plans to increase the tax.

Despite repeated opposition questions suggesting the government plans to increase GST, Mr Abbott, backed up by his ministers, said he just wanted to see the role of the Australian federation debated.

Instead of directly flagging changes to the tax, which currently stands at 10 percent, Mr Abbott said it may well be part of debate about the role of federation and that it was for the states to consider.

“As for the GST itself … the GST is a matter for the states but certainly it is something that will be looked at as part of the federation reform process and as part of the tax reform process,” Mr Abbott said.

Before the coalition election victory last year Mr Abbott ruled out any increases to the GST but on Saturday night at the Sir Henry Parkes oration in Tenterfield he said the states’ spending responsibilities could be adjusted or the commonwealth could stop funding programs of state responsibilities to adjust fiscal imbalance.

“The first approach involves the current spending responsibilities being redistributed so that the Commonwealth would take on more responsibility and the states would deal with less,” Mr Abbott said.

Discussion about the GST changes comes at the same time as a report released on Monday by the Committee for the Economic Development of Australia which recommended that there be a national reform council to oversee serious changes to federation structures.

Treasurer Joe Hockey told Parliament it was false that the coalition was making plans to increase the GST and he had been told the previous government had asked treasury to do modeling to increase the GST.

Mr Hockey said that it was up to Labor to allow Treasury to release these reports.

Mr Abbott also told the opposition to “table the modeling done by the former government”.